I hope you are having an amazing New Year and are looking forward to a brand-new year in your investing success. I have always been a huge fan of creative strategies in acquiring, controlling, and structuring real estate deals, and there are so many great reasons why buying the mortgage note of the real estate is an awesome strategy. They call it “the paper business” because you are really buying the actual mortgage note of the deal and not the property itself. The world of paper is an amazing business and holds potential for great profit. Think about it–why do banks give loans? Because there is enormous profit in providing loans and there are great opportunities in “buying paper.” So here goes, Gail’s top ten reasons why you want to buy mortgage notes right now.
- No tenants, toilets, and trash. When you own the loan of a property, you receive the interest payments from the borrower. You are not managing the day to day operations of the property ownership. You merely “own the paper.”
- Compounding interest. Grab a financial calculator and look what happens when you compound interest payments from a borrower. Banks are no fools when mortgages are concerned, they make money hand over fist. You can too!
- Most mortgage notes are for sale. Banks have been selling mortgage notes to other banks since loans were created. The dollar bill in your pocket is a note. Understanding buying mortgage notes gives you another tool in your transaction engineer toolkit.
- You can buy mortgage notes in any market anywhere!
- There are enormous discounts in buying the mortgage note of a property. There are defaulted mortgage notes and performing mortgage notes. Buying the mortgage note of the property can be a great way to gain control of the asset, but understand in order to own the asset, you will need to foreclose on the mortgage note first.
- Banks are highly motivated to sell right now, as they are looking for cash, thus you can find highly discounted notes in this market. Remember great discounts come from motivated sellers.
- Hire a servicing company – you don’t even have to service the mortgage note, there are servicing companies everywhere who will take over the entire process for you. Buying mortgage notes can truly be a ‘hands-off’ business.
So now that you know why the note buying business is such a lucrative venture, think about how you can add this strategy to buying multi-family apartment complexes, single family homes, commercial property, hotels, etc. Remember you are not purchasing the actual asset but it can be a great way to gain control of the asset. When there is so much opportunity and profit in owning the paper, you may never want to control the asset at all. The possibilities are endless!
Please call me today and we can discuss your new 2018 investment strategy! I can be reached at 321-417-1142 or toll-free at 855-383-3338. You can also contact me via email at firstname.lastname@example.org